A Call Option on Japanese Yen Has a Strike (Exercise)

question 98

Multiple Choice

A call option on Japanese yen has a strike (exercise) price of $.012. The present exchange rate is $.011. This call option can be referred to as:

• A) in the money.
• B) out of the money.
• C) at the money.
• D) at a discount.

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Definitions:

Disclosure

The action of making new or secret information known.

AASB 3

An accounting standard detailing the requirements for the accounting of business combinations.

IFRS 3

Business Combinations, an International Financial Reporting Standard that outlines the accounting and reporting requirements for mergers and acquisitions.

Goodwill

The intangible asset that arises when a company acquires another business for more than the fair value of its separable net assets.